Despite quarterly slip, venture capital investment up 10% in 2011

Venture capitalists invested 10% more funds in start-ups last year, shelling out $32.6 billion, according to Dow Jones VentureSource.

The number of deals by U.S.-based venture companies increased 6% to 3,209, including several transactions involving consumer information service companies such as Twitter, Zynga and LivingSocial. The median amount invested was up 16% to $5 million.

That’s even as the fourth quarter, usually the most active of the year, saw a decline of nearly 4% year over year and nearly 2% from the month before to 803 deals. The amount raised also tumbled, ending up at $7.4 billion.

Healthcare, pushed by the medical IT sector, pulled in the most financing with $8.4 billion, up slightly from 2010.

The information technology industry had the most deals with 1,004 – an improvement on the 967 deals the previous year. The hardware and chip segments both suffered, however, as corporations take over more development duties from younger firms.

And while early-stage deals among consumer information services companies were responsible for 57% of the sector’s activity, nearly three-quarters of the funds went to more mature businesses.

“Venture capitalists still have a strong appetite for early-stage Web start-ups, but more mature companies may be swallowing some of the available cash,” said Zoran Basich, editor of Dow Jones VentureWire. “As companies delay the process of entering the public markets during a difficult time for IPOs, the additional venture funding they need is leaving investors with less capital for new investments.”